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Tuesday, Jul 23, 2024

Changing Faces of Banking Reflect Its Wild Ride

California Bank & Trust has held the top spot on the San Diego Business Journal’s list of local banks for all but one of the last eight years.

The list is ranked by the latest data available from the Federal Deposit Insurance Corp. for local deposits as of June 30, 2011.

The remainder of the list has changed substantially in the last eight years. Nineteen banks — that were on the list for deposits as of June 30, 2004 — are no longer on the list. Today, the list has 21 banks, down from 25, and of those, only half have been on the list for all eight years.

Increase in Deposits

In spite of one of the most tumultuous times for banks since the Great Depression, the total deposits for all 21 banks on the list grew 8.3 percent from $7.2 billion to $7.8 billion from June 30, 2010 to June 30, 2011.

As San Diego’s largest bank, CB&T’s prominence provides a perspective on the local banking community.

“In the past four years, we have seen unprecedented times in the banking industry. Looking back to 2008, the collapse of the mortgage industry obviously played a significant role in the decline of the economy and triggered a very deep and broad recession, affecting both consumers and business owners,” said Tory Nixon, CB&T’s San Diego division president, in a statement. “Fortunately, CB&T has a consistent and strong business model in place, which allowed us to both survive the decline in the marketplace; as well as to help us navigate our clients through these difficult times.”

Nixon said that he is now seeing positive signs in the economy and attributes the bank’s success to a strong credit culture with conservative lending practices.

“When our clients succeed, we succeed. It’s a winning combination,” Nixon said.

A further indication that the banking community is recovering are two new banks which first made the list in 2010. Founded in 2006, Embarcadero Bank, No. 20, grew deposits by 55 percent from 2010 to 2011 and recently purchased Coronado First Bank, No. 18, and assumed CFB’s name, as recently reported by the Business Journal. Vibra Bank, founded in 2008 and No. 19 on the list, grew deposits by 33 percent.

The No. 2 spot is held by BofI Federal Bank (formerly Bank of the Internet), up from No. 6 as a result of a 37 percent increase in deposits. The Carmel Valley-based bank was founded in 2000 around a concept of an Internet-only bank with no branches.

A Vision for Success

Another evergreen on the list is Torrey Pines Bank at No. 3, up from No. 4 last year. Founded in 2003, Torrey Pines Bank is a relative newcomer to the list. Entering the list in 2005 at No. 9, the bank grew deposits by 14 percent from 2010 to 2011.

Torrey’s rise to the top tier of the list is a result of a long-term view, said CEO Gary Cady.

“Our vision was to be a community bank with capacity,” he said. “We hired strong people and had strong backing. We adhered to fundamental banking practices and as a result, we have had none of the loan problems that the other banks have had that eliminated them from being competitors.”

Cady said that the industry consolidation was clearly a problem caused by the economic decline, as well as pressure on banks in the current regulatory environment to be more efficient. Recently, two more banks announced acquisitions. Grandpoint Capital, a Los Angeles-based holding company, announced plans to purchase California Community Bank, No. 6 on the list, and No. 5 ranked Regents Bank.

“I see the consolidation continuing, even though the economy is stabilizing, because it is increasingly difficult for smaller banks to compete without access to capital and liquidity,” Cady said.


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